A campaign calling for an increase in the personal allowance for state pensioners is gaining ground. More than 24,000 people have signed their support to a petition to Parliament calling for the change.
The petition calls for a new tax code to be brought in for state pensioners, to double their personal allowance. You can earn up to £12,570 a year without paying income tax thanks to the personal allowance. If this was doubled, it would rise to £25,140.
This would mean a person on the basic rate who earns above this higher level would save £5,028 a year in tax. The message urges: “If this was implemented, pensioners would receive a higher tax-exempt limit, but wealthier pensioners would still pay tax. We think that people with small private or workplace pensions are currently being taxed unfairly.”
As the petition has reached 10,000 signatures, the Government is now obliged to issue a response. The movement reached this mark more than two weeks ago.
If the campaign reaches 100,000 signatures, the matter will be considered for debate in Parliament. Labour confirmed in the Autumn Statement that the personal allowance and income tax thresholds would remain frozen at their current levels.
This was despite ministers previously saying the freeze would be lifted from April 2028. The question of where to set the personal allowance for state pensioners is a pressing issue as the full new state pension is close to using up all the allowance, meaning those who live solely on the state pension could soon move into paying income tax.
The full new state pension currently pays £230.25 a week, or £11,973 a year, but payments will increase 4.8 percent next April in line with the triple lock. This will lift the full new amount to £241.30 a week, or £12,547.60 a year, only just over £20 away from using up all the personal allowance.
The triple lock ensures state pension payments go up each year in line with whichever is highest: average earnings growth, inflation or 2.5 percent. You can check how much state pension you are on track to receive using the state pension forecast tool on the Government website.
